Time To Educate Consumers On Energy Usage

When people try to cut down their energy bills, changing energy consumption habits is more effective than switching to cheaper providers. However, the latter is what people most often do. They don’t feel attached or loyal to their providers, as in their eyes all suppliers are essentially the same. A more lasting customer relationship, therefore, can be achieved by educating customers to be smarter users and simplifying administrative procedures.

Change energy habits

People are increasingly aware of their own energy consumption and the different energy sources, providers and their packages. By following some basic low-carbon advice, an average household can save as much as €1000 on energy bills annually. However, a lack of transparency and communication about energy usage makes it difficult even for the willing customers to change their habits. The responsibility for this behavioural change sits not only with energy providers, but also with governments, schools, environmental associations and the customers themselves.

Educate in order to change behaviour

It is a challenge to change energy habits. People don’t know how much energy they use, which of their everyday activities are the most energy consuming and how much they could save on their energy bills by reducing those activities. When a bill suddenly goes up, the customer tends to blame the provider. In fact, this situation can be avoided by educating customers on energy usage in order to change their behaviour. On top of this, behavioural changes are often motivated by peer pressure, rather than personal opinion or other external factors.

Consumers do want more information on how to reduce energy consumption. It is because they believe it can reduce their bills, they are concerned about the environment, or they want to be in control of their energy usage. However, as only 28% of customers trust their energy providers, they are not necessarily the best candidates to educate people on their energy use. People likely have higher trust in environmental and consumer associations, schools or the government.

The energy bill: the #1 enemy

Customers often don’t fully understand the information on the bills, which is a major source of irritations. Not only they don’t fully grasp their energy consumption in terms of kWh, they also want to have greater control over their energy usage over time, and be able to compare their bills with past consumption.

42% of energy customers are not satisfied with their billing experience. 30% of customer calls to energy providers are bill-related queries. The most common reasons behind the dissatisfaction are higher-than-expected tariffs, incomprehensible bills, and insufficient billing details.

Consumers do not fully understand green energy

A consumer’s decision to switch from conventional to green energy sources is often prompted by a feel-good factor around the environment. That partly explains why people are willing to pay a premium for green energy sources, although their willingness is diminishing. This is because people do not always receive sufficient information about the alternative energy they pick, and the actual environmental impact of their choices.

People are most willing to pay a premium on their energy bills if it is because of the use of green energy sources. 42% of customers say they would do so.

Consumers have no relationship with their energy provider

Consumers do not feel attached to their energy providers. Recently, due to the emergence of energy comparison websites and flexible contracts, switching providers has become extremely easy. Third-party providers are also actively pushing people to switch. Tariffs are not the only drivers; the other top three reasons to switch are reliability, customer service, and opting for green energy. For example, among those who have switched in the UK, a fifth of them have moved to small suppliers from bigger ones.

Half of the energy consumers in Europe are not considering to switch their energy provider. It is not always because of loyalty. Among those who are not switching, half of them say all providers are the same to them, or they can’t be bothered to go through the switching process.

Consumers fail to communicate changes of situation to their energy provider

All people experience events or situations of change from time to time. Consumers’ energy usage during these periods likely changes as well. If customers don’t communicate these changes with their energy providers, they get irritated by a much higher bill. However, if customers do decide to talk to their providers, on for example relocation, they are most often faced with highly complex utility administration requirements. Therefore, these situations of change, if managed improperly, are major sources of customer irritations.

Throughout the customer lifecycle in the energy sector, situations of change are among the most risky phases in a customer experience. It is often a major source of customer irritations. Examples of situations of change include relocation, having more people in a household (e.g. baby, new partner), or working from home (e.g. unemployment, part-time job). In all these cases, customers don’t understand that communicating these changes with their energy providers is key to avoiding nasty surprises when they’re billed.

Creating smarter energy usage together

By educating consumers on energy use, they are likely to avoid incidents and irritations related to unexpected cost increases. Consumers should become more aware of the impact of their energy choices and actively seek information and support. Governments, in collaboration with consumer and environmental associations, are generally trusted by consumers on energy related issues and therefore are in the best position to educate people on their energy behaviour and choices. Energy providers should support and advise consumers in this transition by simplifying communication and administrative procedures.